It’s been reported that the recession is over, even if some of its unpleasant effects linger. But they may linger indefinitely in Washington if voters approve Initiative 1033.
The measure would limit general fund revenue growth for the state, as well as all its cities and counties, to the combined rates of population growth and inflation. And since the base year would be 2009 – with its stubborn unemployment figures, anemic retail sales reports and recurrent business closures and cutbacks – that would be I-1033’s model for the future.
Elsewhere in the country, the eventual recovery would enable states, counties and cities to restore the services they are cutting now. In Washington, however, the cuts would remain because rebounding general fund revenues that exceed I-1033’s formula would all go to property tax relief.
That may sound appealing to many property owners, but is it reasonable? Unfortunately, population and inflation are only two of many factors that influence the demands on state or local government.
City and county snowplowing costs didn’t soar the past two winters because the population doubled. Snowfall did. Criminals don’t check the consumer price index to decide when to hold up a convenience store. If anything, crime – and the demand for sufficient law enforcement – is more likely to increase when the economy sours, which is also when public revenues dip. Under I-1033, therefore, it would be harder to bolster the police force when it most needs bolstering.
Even when we aren’t enduring the worst economic downturn since the Great Depression, economies are cyclical. That’s why frugal governments build up their reserves during the good years and draw them down during the lean. But I-1033 would lock us into today’s sputtering revenue levels.
Property owners, according to the initiative, are bearing an “obscene and unsustainable” burden. But property taxes in Washington actually rank 25th among all states, and in Spokane County, about half the bill reflects voter-approved assessments. Besides, a previous initiative already limits property tax collections to 1 percent annual growth.
All in all, it’s no wonder that such tight-fisted conservatives as County Commissioner Todd Mielke and Spokane City Councilwoman Nancy McLaughlin oppose I-1033.
Yes, there’s a modest escape hatch in the form of voter approval. That’s not much consolation for local governments that would have to bear the uncertainty – and the expense – of holding elections and herding voters to the polls for every snowstorm, crime wave and efficiency move that called for or generated revenue opportunities.
And with so much financial uncertainty, bond ratings would suffer, driving up the cost of borrowing when voters did approve a capital project.
Most people in this region are willing to shoulder a reasonable tax burden to pay for fundamental government services, and they’re eager for the economic recovery that will make it possible. Initiative 1033 would only prolong the difficult times.